AXIOS (Avery Lotz) - How states are tackling midterm pump pain
States are taking on the stubbornly high fuel prices squeezing Americans ahead of the midterm elections , pushing through tax holidays and other tactics to offer relief while federal efforts have stalled. Why it matters: With November 3 less than 30 days away, the political stakes of those price-lowering levers — even if the relief is only modest — are surging amid sky-high costs. - While several lawmakers have introduced legislation aimed at or pressed for suspending the federal gas tax, which is 18.4 cents per gallon for gas and 24.4 for diesel, Washington hasn't coalesced around a solution. Driving the news: That's left states seeking ways to give their residents relief. Case in point: Ohio Gov. Mike DeWine (R) signed a bill…
What are the potential economic drawbacks of suspending the federal gas tax according to critics?
Critics note that while suspending the taxes might provide some consumer relief, it would not fully offset the price spikes caused by the war in Iran. Furthermore, critics argue that such a move could increase the national deficit and negatively impact the Highway Trust Fund, which is funded by these taxes.
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What are the federal gas tax rates, and what is the current status of federal efforts to suspend these taxes?
The federal gas tax is 18.4 cents per gallon for gas and 24.4 cents per gallon for diesel. While several lawmakers have introduced legislation to suspend these taxes, and the Trump administration signaled openness to a gas tax holiday in the spring, Washington has not yet coalesced around a solution, and Congress has never actually suspended the levy.
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What alternative methods did California and Michigan use to lower gas prices at the pump?
Instead of tax holidays, these states used different strategies:
- California: Took action to permit cheaper, winter-blend gas to be sold earlier than usual.
- Michigan: Allowed gas stations to sell lower-cost gasoline earlier in the spring.
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How have states like Alabama, Louisiana, Nebraska, North Carolina, Oklahoma, and Texas provided relief to the agricultural and timber industries regarding diesel fuel?
These states took similar actions to Indiana by waiving seasonal and traditional restrictions on dyed diesel fuel. For example, Alabama Governor Kay Ivey (R) directed law enforcement to stop enforcing rules against dyed diesel—which is usually reserved for off-road machinery and exempt from taxes—specifically to relieve the state's agricultural and timber communities.
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Which states have suspended, lowered, or stopped increases in their fuel taxes to combat high pump prices, and what specific measures did they implement?
Several states have taken action, including:
- Georgia: Republican Gov. Brian Kemp was the first to suspend fuel taxes in March amid the war in Iran. In late September, he declared a state of emergency and suspended the excise tax again for 30 days.
- Utah: Reduced its gas tax by approximately 15% through the end of the year.
- Kentucky: Governor Andy Beshear (D) froze an expected increase in gas and diesel taxes in May.
- Illinois: Suspended a set increase in its gas tax for six months.
- Indiana: Governor Mike Braun (R) suspended the gas tax in April and renewed the suspension in late September, while also lifting restrictions on dyed diesel for farmers and timber harvesters.
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What specific actions did Ohio Governor Mike DeWine (R) take to provide relief for high fuel prices, and what was the political context surrounding this decision?
Governor Mike DeWine signed a bill into law that suspends Ohio's gas tax for 90 days, an initiative that received bipartisan backing. The move occurred ahead of the midterm elections, where the state's Democratic gubernatorial candidate, Amy Acton, had called for a gas tax holiday, and her rival, Vivek Ramaswamy, also announced a plan with GOP leaders to address the issue.
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